Agenda to Cut Back GNPC Funding

IT IS BACKWARD!

…Says Energy Ministry

.. Describes intent as amounting to ‘Robbing Peter to Pay Paul’

By J. Ato Kobbie, Managing Editor

The Ministry of Energy has dismissed the New Patriotic Party’s flagbearer, Nana Addo Dankwa Akufo-Addo's proposal to divert oil revenue allocations from the Ghana National Petroleum Corporation (GNPC) to fund his proposed ‘free secondary education,’ describing it as irresponsible populism.

“When countries are strengthening their national oil companies to be the cash cows of their economies, it is strange that the NPP flagbearer is proposing the country goes back 20 years,” Mr. Buah wondered, saying, “NPP is trying to gain cheap popularity and confuse the public by suggesting that investment in national Oil and Gas capacity is somehow the enemy of educational development."

Speaking to The Business Analyst in Accra over the weekend, the Deputy Minister of Energy in charge of Petroleum, Hon. Emmanuel Armah-Kofi Buah, said now that there is a national consensus that GNPC becomes lead Operator in order for Ghana to increase its revenue and other dividends from oil, the last thing that anyone can talk about is cutting down the funding that is required to fund such operations.

Mr. Buah, who is also the Member of Parliament (MP) of the Ellembelle Constituency in the Western Region, said participating in oil exploration, development and production comes with an obligation to contribute to the costs during the process.

“Without these contributions the bulk of revenues that are currently being received would not be earned,” he added.

He said, for example, in addition to GNPC contributing 13.62% of the cost of producing the Jubilee Field, the national oil company would soon be required to contribute five (5) percent of the cost of developing the Tweneboa, Enyera and Ntomme (TEN) project, and subsequently, 15% of the production cost.

“We agree that oil revenue must contribute to funding the development of the country, including the area of education; however, if you want to do that the best approach is to fund GNPC to increase its stakes in oil blocks to take the commanding heights of the production process, and to strengthen the sector to ensure that the bulk of the revenue comes to Government, instead of going to international oil companies,” Mr. Buah argued.

For him, it is only when this is done that there will be enough and sustained revenue inflow to fund education, among other needs of the country.

“The flagbearer’s mantra of “a belief in Ghana and the Ghanaian” appears to be inconsistent with his current stance on Ghanaian ownership and leadership of this burgeoning industry and in complete disregard for the responsibilities that come with such a vision,” he stressed.

The minister said the programmes and budgets of GNPC are always submitted to the Minister of Energy, who in collaboration with the Minister of Finance and Economic Planning submits it to the 230-member Parliament, which has over 100 members of the NPP, for approval.

He expressed regret that Nana Addo and the NPP are taking cheap shots at an important national commercial organization, which cannot defend itself against a partisan attack and cautioned politicians against undermining national institutions just to win power. He warned that the NPP's real agenda is to weaken national institutions to create room for the kind of dubious deals that characterized the Kufour Administration.

He said the last time NPP was in power they almost destroyed GNPC by closing down some of its key departments.

“They closed down its drilling, marine, aviation, marketing and even corporate affairs departments so that when we finally found commercial oil as a result of the long-term planning and investment began under the PNDC, we were in a relatively weak position,” he elaborated, adding that “today, civil society is asking why GNPC does not invest in owning assets to lower operational costs and increase national returns.”

He said the country has a long way to go to get back on track and this will require investment and therefore “the last thing that anyone should be thinking about is disinvesting in GNPC."

The NPP flagbearer had said during his turn at an Institute of Economic Affairs (IEA) Encounter with 2012 Election flagbearers that he was going to take a percentage of oil funds allocations to the national oil company to fund his proposed ‘free secondary school’ agenda.

This article was originally published in The Business Analyst of Wednesday, 29th August – Tuesday, 4th September, 2012. E-mail: j.atokobbie@yahoo.com